Leerink Partners Raises Price Target on Ironwood Pharma (IRWD) to $14; Reiterates Market Perform

August 5, 2016 9:03 AM EDT
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Price: $15.24 +2.35%

Rating Summary:
    10 Buy, 11 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 21 | Down: 36 | New: 11
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Leerink Partners reiterated a Market Perform rating on Ironwood Pharmaceuticals (NASDAQ: IRWD), and raised the price target to $14.00 (from $10.00), following the company's 2Q earnings report. Linzess sales grew to $150.5m, ~2% above forecasts. Underlying sales growth of +34% was driven by 29% Rx volume growth. IRWD will launch Zurampic (gout) in October 2016. Zurampic prevents the reabsorption of uric acid through a mechanism that is complementary to xanthine oxidase inhibitors (XOI) such as allopurinol.

Analyst Jason M. Gerberry commented, "IRWD reported 2Q Linzess sales of ~$151m, slightly above our est. of $147m in a relatively straightforward qtr. Based on 2Q updates – we are now modeling risk adjusted life cycle management (LCM) contribution from colonic release through 2034E, which along with modest upward revisions to our Linzess forecasts in out-years increases our price target to $14/shr (from $10/shr). We are increasing our OpEx spend for 2016E to $321m (from $306m) to reflect increased spend on Zurampic (gout) launch and spend associated with development of a fixed-dose combination Zurampic-allopurinol agent, and our '17-21E OpEx spend by 3-6% for Linzess LCM programs, which offsets some of the upside from the inclusion of risk adjusted colonic release to our model. We remain MP."

For an analyst ratings summary and ratings history on Ironwood Pharmaceuticals click here. For more ratings news on Ironwood Pharmaceuticals click here.

Shares of Ironwood Pharmaceuticals closed at $14.16 yesterday.



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